The Labour Party have been busy campaigning outside tube stations today with the message that the fares increase is wrong as Boris Johnson already "takes more in fares from you than he needs." Boris supporters have also been outside tube stations with a leaflet which backs the tube upgrades that are taking place as key for economic growth.

Commuters are being told by the Ken Livingstone campaign that TfL "has amassed hundreds of millions of pounds of surplus cash." Really? It looks to me from TfL's last Annual Report that there is debt of £6.3 billion and an annual interest bill of £400 million. Green Party candidate for Mayor Jenny Jones has raised concerns about this and the implications for "any Mayor" in having to raise fares. Perhaps some Green Party campaigners will pop up at tube stations to increase awareness of this. They could note the increased borrowing limit to over £7 billion.

That is the context of any operating surpluses that TfL makes. It is to help finance investment. When Ken Livingstone was Mayor he combined fare increases with operating surpluses. In 2003/04 the operating surplus was £100 million. In 2004/05 it was £81 million. In 2005/06 it was £195 million. In 2006/07 it was £247 million. In 2007/08 it was £150 million. These surpluses were not enough to pay for capital work – there was borrowing and Government grant on top.

You will be shocked to discover there is a discrepancy in what Livingstone says now and what he said as Mayor.

He used to say there is no ‘profit’ in the transport budget. In 2006 he said : “We do not make a profit; we are not allowed to make a profit.”

He used to say you can’t cut fares without cutting investment. In response to a proposal to cut fares he said: “That is fine as long as it also has the honesty to go on and say what I should cut whilst cutting the fare increase.”

Now he says you can and that he will deliver his policy; “Without touching either future investment budgets, reserves, or existing operating budgets.”

He used to say extra money in the transport budget is used for investment. Speaking of his transport plans in 2004: “capital investment will be funded from grant provided by government grant and revenue surpluses.”

Now he says it isn’t; “the operating surplus is a completely separate budget to capital budgets which fund investment.”

And now he says you should use the surplus to cut fares: “That’s the responsible thing to do in tough times – using the surplus in the transport network to cut the fares.”

The reality is that any "debt repayment" this year from operating surplus merely means that the upgrades can proceed without the total amount of borrowing rising completely out of control.

The Labour London Assembly member Val Shawcross made the most astonishing claim at the last Mayor's Question Time about a supposed £487 milion debt repayment:

If you had that surplus, Mr Mayor, and you said you were looking for ways of doing additional capital projects and reducing the fares, why did you instead apply that enormous amount of money to put cash back into the hands of the bankers and actually repay debt when the interest rates TfL was paying were extremely low?

Boris responded:

On your point about the debt repayments, let me explain that, because I think it will be of advantage to people to understand what that is. You make an interesting though absurd point. What we are doing is trying to minimise the impact on our finances of sustaining these debts and actually in the long-term the repayments we are making will save £140 million. If you choose, you can fire-hose away that £140 million to the bankers in interest, if you want. Is that what you want? Is that your policy? You want to give your friends the bankers £140 million in interest? I do not think that would be the right way to go.

I wonder if Val, who is Livingstone's running mate, applies the same logic to her Credit Card statement: That to clear the balance would be quite wrong as it would "put money in the hands of the bankers."

But there is no guarantee that because Livingstone's campaign is dishonest and contradictory that it will fail. Despite his enthusiasm for insulting his comrades there were lots of them out campaigning for him today.

The poll lead that Boris has is modest and entirely dependent on Labour supporters. Tim was quite right to warn against complacency in his post earlier today over on ToryDiary.